TEMECULA VALLEY BANK EXECUTIVE SUPPLEMENTAL COMPENSATION AGREEMENT

1.1

“Accrued Liability Balance” shall mean the amount accrued by the Bank to pay the benefit promised under this Agreement. For purposes of this Agreement, the Accrued Liability Balances previously made under the January 28, 2004 and the August 1, 2005 agreements shall

be combined and, in conjunction with any additional accrued amounts made under this Agreement, shall be considered the Accrued Liability Balance.

1.2

“Beneficiary” shall mean the person(s) designated by the Executive, including the estate of the Executive, entitled to a benefit under Articles 3 and 4.

1.3

“Board” shall mean the Board of Directors of the Bank.

1.4

“Change in Control” shall be as defined in Section 1.409A-3(i)(5) of the 409A Final Regulations, and shall mean a change in the ownership of the corporation (Section 1.409A-3(i)(5)(v)); a change in the effective control of a corporation (Section 1.409A-3(i)(5)(vi)), or a change in the ownership of a substantial portion of the assets of a corporation ((Section 1.409A-3(i)(5)(vii)).

1.5

“Code” shall mean the United States Internal Revenue Code of 1986, as amended.

1.6

“Disability” shall mean Executive (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Bank. Medical determination of Disability may be made by either the Social Security Administration or by the provider of an accident or health plan covering employees of the Bank, provided that the definition of Disability under such a plan complies with the requirements set forth herein. Upon the request of the Plan Administrator, the Executive must submit proof to the Plan Administrator of Social Security Administration’s or the provider’s determination.

1.7

“Early Termination” shall mean that the Executive’s employment with the Bank has terminated prior to Executive’s Normal Retirement Age, and such termination is not due to death, Disability, Change in Control, or an approved leave of absence.

1.8

“Effective Date” shall mean January 1, 2005.

1.9

“Normal Retirement Age” shall mean the date on which the Executive attains age 70.

1.10

“Plan Administrator” shall mean the plan administrator described in Article 6.

1.11

“Plan Year” shall mean each twelve-month period commencing on January 1 and ending on December 31 of each year.

1.12

“Separation from Service” shall mean that the Executive has experienced a termination of employment from the Bank. For purposes of this Agreement, a termination of employment will be deemed to have occurred where the facts and circumstances indicate that the Executive and the Bank reasonably anticipated that Executive would permanently reduce his level of bona fide services to the Bank to a level not to exceed 45% of the average level of bona fide services provided to the Bank in the immediately preceeding 12 months.

2.1

Normal Retirement Benefit . Upon attaining the Normal Retirement Age while in the full-time active service of the Bank, Executive shall be entitled to receive the annual benefit described in Section 2.1.1 below. The Bank shall distribute this benefit to the Executive pursuant to Section 2.1.2 in lieu of any other benefit under this Article 2.

2.1.1

Amount of Benefit . The annual benefit under this Section 2.1 shall be an amount equal to Three Hundred Seventy-Five Thousand Dollars ($375,000).

2.1.2

Form and Timing of Benefit Payment . The Bank shall distribute the annual benefit to the Executive in twelve (12) equal monthly installments, commencing on the first day of the month following the Executive’s Normal Retirement Age. The annual benefit shall be distributed to the Executive for the greater of Executive’s lifetime or for a period of twenty (20) years.

2.2

Early Termination Benefit . Upon Executive’s Early Termination, Executive shall be entitled to an annual benefit as described in Section 2.2.1 below. The Bank shall distribute this benefit to the Executive pursuant to Section 2.2.2 in lieu of any other benefit under this Article 2.

2.2.1

Amount of Benefit . The annual benefit under this Section 2.2 is calculated by taking the Accrued Liability Balance, as of the date of Separation from Service, and calculating an annuity of 20 substantially equal payments, payable to the Executive pursuant to Section 2.2.2 below.

2.2.2

Form and Timing of Benefit Payment . The Bank shall distribute the annual

benefit amount (as determined in accordance with Section 2.2.1 above) to the Executive each year for 20 years, the first payment commencing on the first day of the month following Executive’s Separation from Service.

2.3

Disability Benefit . Upon Executive’s Disability, the Executive shall be entitled to the annual benefit described in Section 2.3.1 below. The Bank shall distribute this benefit to the Executive pursuant to Section 2.3.2 in lieu of any other benefit under this Article 2.

2.3.1

Amount of Benefit . The annual benefit under this Section 2.3 is an amount equal to Three Hundred Seventy-Five Thousand Dollars ($375,000).

2.3.2

Form and Timing of Benefit Payment . The Bank shall distribute the annual benefit to the Executive in annual installments, commencing on the first day of the month following the Executive’s Disability. The annual benefit shall be distributed to the Executive for the greater of Executive’s lifetime or for a period of twenty (20) years.

2.4

Change in Control Benefit . Upon a Change in Control, the Executive shall be entitled to the annual benefit described in this Section 2.4 in lieu of any other benefit under this Article.

2.4.1

Amount of Benefit . The annual benefit under this Section 2.4 is an amount equal to Three Hundred Seventy-Five Thousand Dollars ($375,000).

2.4.2

Form and Timing of Benefit Payment . The Bank shall distribute the annual benefit to the Executive in annual installments, commencing on the first day of the month following the Executive’s Separation from Service. The annual benefit shall be distributed to the Executive for the greater of Executive’s lifetime or for a period of twenty (20) years.

2.5

Restriction on Timing of Distribution . Notwithstanding any provision of this Agreement to the contrary, distributions to the Executive may not commence earlier than six (6) months after the date of a Separation from Service (or, if earlier, the date of death of the Executive) if, pursuant to Internal Revenue Code Section 409A,

Executive is considered a “specified employee” (under Internal Revenue Code Section 416(i)) of the Bank if any stock of the Bank is publicly traded on an established securities market or otherwise. In the event a distribution is delayed pursuant to this Section 2.5, the originally scheduled distribution shall be delayed for 6 months, and shall commence instead on the first day of the seventh month following Separation from Service. If payments are scheduled to be made in installments, the first six months of installment payments shall be delayed, aggregated, and paid instead on the first day of the seventh month, after which all installment payments shall be made on their regular schedule. If payment is scheduled to be made in a lump sum, the lump sum payment shall be delayed for six months and instead be made on the first day of the seventh month.

2.5

Certain Accelerated Payments . The Bank may accelerate distribution to the Executive of deferred amounts (including for payment of employment, income, and other taxes), provided that such distribution(s) meets the requirements of Sections 1.409A-3(j)(4).

2.6

409A Tax Gross-up . To the extent amounts deferred under this Agreement become includible in Executive’s income under Section 409A of the Code as a result of the failure of the Agreement to comply with the requirements of Section 409A or regulations promulgated thereunder, the Bank shall make a payment to the Executive equal to (1) the resulting combined state and federal income tax liability; (2) the amount of any excise tax imposed on amounts includible in income; and (3) the amount of any underpayment penalties imposed under Section 409A. This payment shall be made in a lump sum to the Executive no less than 30 days prior to the end of any tax year in which amounts first become includible in income pursuant to Section 409A and regulations thereunder. Calculation of amounts includible in income shall be made according to regulations issued under Section 409A.

3.1

Death Benefit Prior to Executive’s Normal Retirement Age . Upon Executive’s death prior to the Normal Retirement Age, Executive’s Beneficiary shall be entitled to receive an

annual amount equal to the Normal Retirement Benefit amount described in Section 2.1.1. Such amount shall be payable to the Beneficiary in annual installments for the lesser of 20 years or the Beneficiary’s lifetime. Distributions to the Beneficiary shall commence on the first day of the month following Executive’s death, and shall be paid on each anniversary thereof until all distributions have been made. For purposes of this Section 3.1, the 20-year benefit shall be calculated as of the date of the Executive’s death.

3.2

Death Benefit After Executive’s Normal Retirement Age . Upon Executive’s death following the Normal Retirement Age, Executive’s Beneficiary shall be entitled to receive an annual benefit amount equal to the Normal Retirement Benefit amount described in Section 2.1.1. This annual benefit shall be paid to the Beneficiary for the lesser of 20 years or the Beneficiary’s lifetime. For purposes of this Section 3.2, the 20-year benefit shall be calculated using as a start date the Executive’s Normal Retirement Age. For example, if Executive’s Normal Retirement Age is age 70, and Executive dies at age 80, the Executive’s Beneficiary would be entitled to receive a death benefit equal to the lesser of 10 years or the Beneficiary’s lifetime (20 years (starting at age 70) minus 10 years = 10 years of remaining death benefit).

4.1

Beneficiary . Each Executive shall have the right, at any time, to designate a Beneficiary(ies) to receive any benefits payable under the Agreement to a Beneficiary upon the death of the Executive. The Beneficiary designated under this Agreement may be the same as or different from the beneficiary designation under any other plan of the Bank in which the Executive participates.

4.2

Beneficiary Designation; Change . The Executive shall designate a Beneficiary by completing and signing the Beneficiary Form, and delivering it to the Plan Administrator or its designated agent. The Executive’s beneficiary designation shall be deemed automatically revoked if the Beneficiary predeceases the Executive or if the Executive names a spouse as Beneficiary and the marriage is subsequently dissolved. The Executive shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Form and the Plan

Administrator’s rules and procedures, as in effect from time to time. Upon the acceptance by the Plan Administrator of a new Beneficiary Form, all Beneficiary designations previously filed shall be cancelled. The Plan Administrator shall be entitled to rely on the last Beneficiary Form filed by the Executive and accepted by the Plan Administrator prior to the Executive’s death.

4.3

Acknowledgment . No designation or change in designation of a Beneficiary shall be effective until received, accepted and acknowledged in writing by the Plan Administrator or its designated agent.

4.4

No Beneficiary Designation . If the Executive dies without a valid Beneficiary designation, or if all designated Beneficiaries predecease the Executive, then the Executive’s spouse shall be the designated Beneficiary. If the Executive has no surviving spouse, or the marriage was dissolved prior to Executive’s death, the benefits shall be paid to the personal representative of the Executive’s estate.

4.5

Facility of Distribution . If the Plan Administrator determines in its discretion that a benefit is to be paid to a minor, to a person declared incompetent, or to a person incapable of handling the disposition of that person’s property, the Plan Administrator may direct distribution of such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent person or incapable person. The Plan Administrator may require proof of incompetence, minority or guardianship as it may deem appropriate prior to distribution of the benefit. Any distribution of a benefit shall be a distribution for the account of the Executive and the Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Agreement for such distribution amount.

5.1

Termination for Cause . Notwithstanding any provision of this Agreement to the contrary, the Bank shall not distribute any benefit under this Agreement if Executive’s service is terminated by an affirmative vote of 80% of the Board after an independent evaluation by an arbitrator selected jointly by Executive and the Board

for:

(a)

Conviction of a felony or of a gross misdemeanor involving moral turpitude in connection with the Executive’s employment with the Bank; or

(b)

A willful violation of any law or significant Bank policy committed in connection with the Executive’s employment; and

(c)

Either (a) or (b) result in a material adverse effect on the Bank.

5.2

Removal . Notwithstanding any provision of this Agreement to the contrary, the Bank shall not distribute any benefit under this Agreement if the Executive is subject to a final removal or prohibition order issued by an appropriate federal banking agency pursuant to Section 8(e) of the Federal Deposit Insurance Act.

6.1

Plan Administrator Duties . This Agreement shall be administered by a Plan Administrator which shall consist of the Board, or such committee or person(s) as the Board shall appoint. The Plan Administrator shall also have the discretion and authority to (i) make, amend, interpret and enforce all appropriate rules and regulations for the administration of this Agreement and (ii) decide or resolve any